credit spread

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Credit spread

Applies to derivative products. Difference in the value of two options, when the value of the one sold exceeds the value of the one bought. One sells a "credit spread." Antithesis of a debit spread Related: Quality spread.

credit spread

The simultaneous sale of one option and purchase of another option that results in a credit to the investor's account. Thus, more funds are received from the sale than are required for the purchase. Compare debit spread.
References in periodicals archive ?
This "ground-up" approach solves the problem of maturity mismatch when constructing credit-spread indices.
The country's life insurers are also increasing their investments in foreign credit-spread products to improve yields.
The optimal strategy for managing a cash balance plan's assets involves purchasing credit assets to achieve the appropriate credit-spread hedge (determined within the context of the overall portfolio), and then investing the rest of the portfolio in Treasury securities and long and short interest rate derivatives that match the plan's specific key interest rate duration sensitivities.
Using a credit-spread discipline, investment managers might buy an industrial bond when spread levels are wide and it's attractively priced from that standpoint, LoPorto said.
Credit-spread spikes in 1990 and 1999 coincided with the beginning of multiple-year runs of small-cap outperformance.
The credit-spread program is an automated system used to prepare a detailed credit analysis of a commercial company's financial statement.